BYRON Bay nightclub La La Land has lost a Supreme Court bid to be allowed to operate past midnight on Sundays.

The nightclub's licensees were ordered to pay all the Independent Liquor and Gaming Authority's court fees after its failed attempt to remain open until 3am on Monday mornings.

A licence to operate to 3am was first granted in April 2009, but was overturned in July last year.

La La Land's owners argued the shortened hours were not in the public interest and limited hospitality workers' ability to enjoy evening recreation on one of the only nights available to them.

They also claimed the decision was biased, given that a handful of other NSW bars and restaurants were granted post-midnight licences about the same time as theirs was denied.

Justice Christine Adamson dismissed the appeal and ordered La La Land's licensees to pay all of the ILGA's costs, unless a written application was made within a week.

The nightclub's management was issued a warning last year after undercover Office of Liquor, Gaming and Racing agents found they had let people in after its 1.30am lock-out on a Saturday night, served alcoholic energy drinks after 2am, failed to provide adequate security and served more than four drinks to a single punter after midnight.